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Ponzi Scheme Suspected in West Virginia

Budget Finance Company abruptly closed recently, causing many of its clients to worry about the security of their investments. Last month, federal agents raided the West Virginia investment and lending company, taking computers and other records to analyze. The several hundred clients of Budget Finance are unsure whether they will get their money back.

The Wetzel County Prosecuting Attorney’s office, the West Virginia State Auditor’s Office Securities Division, and the U.S. Attorney’s Office of the Northern District of West Virginia are currently investigating this case. These agencies claim that potential victims are coming forward every day with new information.

U.S. Attorney William Ihlenfeld II said that Budget Finance Company is suspected of running a Ponzi scheme that caused millions of dollars in investor losses.

Budget Finance has been a fixture in its small-town community for decades. Some said that just about everyone used the company for lending and investments, and many residents of the community knew the president of the company well. Those familiar with Budget Finance’s dealings said that the company promised returns up to 10 percent, and many of its clients had thousands and even hundreds of thousands of dollars invested with them.

The first signs of trouble came about a month ago, when investors could not reach anyone at Budget Finance. The Division of Financial Institutions also attempted to contact the president and others at the company to inform them that Budget Finance was required by law to stay open for at least four days per week, but the answering machine said that Budget Finance was “closed indefinitely.”

One former Budget investor told the Charleston Gazette-Mail that she got a bad feeling about the company earlier this year, and advised others of her concerns. She did not specify her reasons for believing the company was in trouble.

Officials investigating the Budget Finance closure are also attempting to find a potential link between Budget Finance and the other company its president owned, River Rentals Inc., a real estate business.

For more information, you can view the order by the Commissioner of Financial Institutions for the State of West Virginia.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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